The reason that new traders fail that doesn't involve psychology

The emotional aspect is also a very important element .
On a personal level I find this element a lot easiar to manage when I've got a fundamental reason behind my pair choices - it gives me more confidence to leave a trade to run until it hits my pre-designated tp knowing that there is logic for the pair to move my way.

It's like anything in life - if you know something is generally good or healthy, you worry less about it and let life take its course with a lot more comfort

I am a little worried over the opposite problem, which is basically succeeding in spite of my ignorance :)

If anybody tells you there's only one way to trade, don't believe him.

There's only one way to fail though, that is to fall prey to crowd psychology and deviate from your trading plan. All failure stem from either not having a proper plan or deviating from said plan.

If you are failing, and you have a plan and you are sticking to it, that means you need a proper plan.

If you have don't have a plan, get one.

If you have a plan, but are not sticking to it, it's called shooting yourself in your own foot. Someone once said, 'As long as we stopped shooting ourselves in our own foot, we will start looking like geniuses to others.'

In my opinion, trading is always related to psychology. It's your mind that takes decisions. Either you observe the market, read the charts or follow news, your thinking is biased by all these things. You take decisions believing this is the right thing to do. How can you get rid of your emotions? No one enters a bad trade on purpose with the mindset to lose money. It's human nature to make mistakes and psychology is responsible for your trading, either you realize it or not.

I have a trading strategy, which needs modifcations. with 3:1 and trailing stop management i think the win rate is around 30 percent. if its 1:1 risk reward, there will be less drawdowns and around 70 percent winning rate. Which do you think is better guys? Please help me nick too!

Back to the topic on hand: Fundamentals...

If you have a decent service that can spit news at you, and you have had enough experience to digest that news and place a trade on it 9/10 times you will be profitable. The key to fundamentals is make sure the event will be high impact and have enough momentum to swing the market. Interest rates, GDP, employment, and NFP are all great examples.

Use a moderately high lot size, with SL placed above nearest resistance (Technicals play a part).
Then over time you will see a pattern on how the market reacts to news, set a pip target, and exit every time on your target. Never place another trade, never change the SL. Over time you will be able to trade 3-5 news events a week and pull in a steady profit.

I dont have a problem picking profitable trades, but I do have a problem knowing when to exit and take the said profit. It is always a dilemma, as I think if I get out of it i will need to re-enter it as fundamentally it is doing what I need it to do. I have very very wide stop losses to allow the trade to move, knowing fundamentally it should react how I intend it to.

It's because they are muppets? 😁

Same here, sometimes when i just exit the trades will go back up to 3:1 reward risk and i end up only taking 1:1 or less with trailing stop.

I dont bother with trailing stops as I always seem to get stopped out prematurely, even if I set them quite wide....

Dave386 posted:
I dont bother with trailing stops as I always seem to get stopped out prematurely, even if I set them quite wide....

  Then the time you don't use trail, the trade ends up margin calling you huh?

If you like fundamentalist analysis, so why not perform stock transactions?

Totally agree with this

TRENTFX posted:
Back to the topic on hand: Fundamentals...

If you have a decent service that can spit news at you, and you have had enough experience to digest that news and place a trade on it 9/10 times you will be profitable. The key to fundamentals is make sure the event will be high impact and have enough momentum to swing the market. Interest rates, GDP, employment, and NFP are all great examples.

Use a moderately high lot size, with SL placed above nearest resistance (Technicals play a part).
Then over time you will see a pattern on how the market reacts to news, set a pip target, and exit every time on your target. Never place another trade, never change the SL. Over time you will be able to trade 3-5 news events a week and pull in a steady profit.

BenNathanFX posted:
Totally agree with this

TRENTFX posted:
Back to the topic on hand: Fundamentals...

If you have a decent service that can spit news at you, and you have had enough experience to digest that news and place a trade on it 9/10 times you will be profitable. The key to fundamentals is make sure the event will be high impact and have enough momentum to swing the market. Interest rates, GDP, employment, and NFP are all great examples.

Use a moderately high lot size, with SL placed above nearest resistance (Technicals play a part).
Then over time you will see a pattern on how the market reacts to news, set a pip target, and exit every time on your target. Never place another trade, never change the SL. Over time you will be able to trade 3-5 news events a week and pull in a steady profit.

  The bias to the statement above is that not EVERYTIME FUNDAMENTALS is reflected in price action. Saying that it is 90% of the times accurate is a far cry from the truth. Your best bet is to stay away from high impact news, as high impact news only extends the formation which is seen on the lower tf.
  The sad reality is that many of us rely on high impact news in order to turn profits (after sitting in red or most of the trade prior to the high impact news) and when the guess is wrong, then we hold on to that position saying the market is 'stop hunting'. When you see traders talking about stop hunting, those are the ones holding on to positions which the market has eaten up.

Hey all,

Wow, the title of this thread seems to have changed drastically since I subscribed to it initially. A lot of interesting points made by a lot of knowledgeable people. However, the question being asked cannot be completely covered with one or two factors. I am by no means a pro trader in the sense that I know just about everything, but in my trading career I have learned a lot of valuable (and very costly) lessons from the mistakes I made, and indeed still make today.

I started trading in 2010, and through the years I figured out quite a bit of what I personally need to do to avoid my mistakes and consequently my losses. People started asking me what my 'secret' was to my consistent profits (I must point out these profits are small profits - have a long way to go before I can call myself a millionaire 😄) The result of the consistent nagging was a training course I developed over the years (started a manual to teach myself - turned into a course I now teach others). Attached are my own personal trading rules that help me minimize my losses and maximize my profits.

Again I wish to point out that these rules were created by myself, for myself, and by no means are supposed to reflect the views of a pro trader, because I don't consider myself a pro in any way. They are probably very 'cheesy' in many people's view, but they have saved my trading account more times than I can count, and in fact helped me make a consistent profit (relatively small in comparison to most pro traders) over the last three years.

So the point I wish to make here, is that a trader's failure, being it a few small losses, a large loss or complete loss if the account, can all be traced back to the trader's decisions. These decisions are mostly related to the trader's 'trading psychology', but overall I think a lack of, or disregard of a trader's trading rules is ultimately the reason for the failure. When I take a loss I always check which rule I broke. After a loss which I feel was not due to the natural movement of the markets, I take a break from my trading read through my rules and identify which one I broke. Trust me, after breaking the same rule a few times you will start to remember NOT to do that while trading.

My advise to new traders (or any trader for that matter) is to start to write down your own rules. As you go along analysing your mistakes, you add new rules and so expand your 'business code of conduct' which will help you be consistently profitable in the long run. I'm not saying my rules will work for others, each trader has his/her own methods and strategies to trade with. And don't write down rules to impress others with. The market and other traders don't care about your rules. The rules are for yourself to improve your trading, minimize your losses, maximize your profits and keep you objective, focusses and disciplined (basically keep you from losing your cool while trading).

Anyway, just thought I would throw a spanner in the works here... 😄
Good luck trading out there!
Jaco

Nice sharing

CrazyTrader posted:
Nice sharing

Thanks dude, hopefully it can help someone, somewhere in some way 😀

JacoAF posted:
Hey all,

Wow, the title of this thread seems to have changed drastically since I subscribed to it initially. A lot of interesting points made by a lot of knowledgeable people. However, the question being asked cannot be completely covered with one or two factors. I am by no means a pro trader in the sense that I know just about everything, but in my trading career I have learned a lot of valuable (and very costly) lessons from the mistakes I made, and indeed still make today.

I started trading in 2010, and through the years I figured out quite a bit of what I personally need to do to avoid my mistakes and consequently my losses. People started asking me what my 'secret' was to my consistent profits (I must point out these profits are small profits - have a long way to go before I can call myself a millionaire 😄) The result of the consistent nagging was a training course I developed over the years (started a manual to teach myself - turned into a course I now teach others). Attached are my own personal trading rules that help me minimize my losses and maximize my profits.

Again I wish to point out that these rules were created by myself, for myself, and by no means are supposed to reflect the views of a pro trader, because I don't consider myself a pro in any way. They are probably very 'cheesy' in many people's view, but they have saved my trading account more times than I can count, and in fact helped me make a consistent profit (relatively small in comparison to most pro traders) over the last three years.

So the point I wish to make here, is that a trader's failure, being it a few small losses, a large loss or complete loss if the account, can all be traced back to the trader's decisions. These decisions are mostly related to the trader's 'trading psychology', but overall I think a lack of, or disregard of a trader's trading rules is ultimately the reason for the failure. When I take a loss I always check which rule I broke. After a loss which I feel was not due to the natural movement of the markets, I take a break from my trading read through my rules and identify which one I broke. Trust me, after breaking the same rule a few times you will start to remember NOT to do that while trading.

My advise to new traders (or any trader for that matter) is to start to write down your own rules. As you go along analysing your mistakes, you add new rules and so expand your 'business code of conduct' which will help you be consistently profitable in the long run. I'm not saying my rules will work for others, each trader has his/her own methods and strategies to trade with. And don't write down rules to impress others with. The market and other traders don't care about your rules. The rules are for yourself to improve your trading, minimize your losses, maximize your profits and keep you objective, focusses and disciplined (basically keep you from losing your cool while trading).

Anyway, just thought I would throw a spanner in the works here... 😄
Good luck trading out there!
Jaco

  I'd agree about it all boiling down to the traders psychology. It would appear that so many times the causes of big losses if not 100% of the times is y not following the rules which one has set forth.

Hey guys! I think that most newbies are looking for a perfect and simple trading strategy but they are totally forgetting about Risk Management. And that's causing the problem! I believe that even most of crappy free fx-strategies which you can easily find on youtube will work if you will implement correct RM. Will you agree on that?